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At 30 June 2016, the consolidated entity had financial instruments with carrying amounts as shown in the following table:
Fixed interest
rate maturing in:
Floating
interest
rate
1 year
or less
Non-interest
bearing
Total carrying
amount as per the
balance sheet
Weighted
average effective
interest rate*
Financial instruments
2016
$’000
2015
$’000
2016
$’000
2015
$’000
2016
$’000
2015
$’000
2016
$’000
2015
$’000
2016
%
2015
%
(i) Financial assets
Cash
8,801 19,067 20,558 4,000
1
1 29,360 23,068
2.6
2.9
Receivables
-
-
-
-
4,943 4,943 4,783 4,943
Total financial assets
8,801 19,067 20,558 4,000 4,944 4,944 34,143 28,011
(ii) Financial liabilities
Trade creditors
-
-
-
-
606
106
606
106
Sundry creditors and accruals
-
-
-
-
1,294 1,044 1,294 1,044
Total financial liabilities
-
-
-
-
1,900 1,150 1,900 1,150
* The weighted average interest rate is calculated by dividing interest income for year over the average cash balance held.
(b) Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign
exchange rates.
The consolidated entity is exposed to material currency risks due to revenue denominated in US dollars. Currency risk management
strategies are regularly reviewed.
Bank accounts denominated in US dollars are maintained in order to facilitate receipts and payments. Cash reserves at 30 June 2016
included $0.5 million (2015: $0.2 million) denominated in US dollars. A change of 10% in the AUD/USD exchange rate at 30 June 2016
would have an immaterial impact on the net profit and equity of the consolidated entity.
The balance of receivables at 30 June 2016 includes the right to receive US$3.2 million (2015: US$3.6 million) of Axiron® royalties for
the fourth quarter of the 2015/16 financial year. A change of 10% in the AUD/USD exchange rate at 30 June 2016 would change the
consolidated net profit and equity by approximately $0.4 million (2015: $0.4 million).
The consolidated entity does not enter into forward exchange contracts. At balance date, there were nil (2015: nil) forward exchange
contracts.
The accounting policy for forward exchange contracts is detailed in Note 1(n).
In future periods, material amounts of revenue are expected to be received in US dollars as royalties and potential sales milestone
payments under the Axiron® agreement are payable in US dollars.
(c) Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an
obligation. The maximum exposure to credit risk of recognised financial assets at balance date, excluding the value of any collateral
or other security, is the carrying amount of those assets, net of any provisions for impairment of those assets, as disclosed in the
Consolidated Statement of Financial Position and notes to the consolidated financial statements.
Cash reserves form the majority of the consolidated entity’s financial assets at 30 June 2016. Acrux Limited is a Pooled Development
Fund. The Pooled Development Fund Act restricts the investment of cash reserves to deposits with an Australian bank licensed to
take deposits. This policy is also followed for all cash held by the other companies within the consolidated entity.
ACRUX ANNUAL REPORT 2016 45